Chip Shortage Effects Magna Powertrain-Causes Heat Treatment Slowdown

As “The Monty Heat Treat News” has been reporting the ongoing “chip” shortage which has effected auto makers and their suppliers around the world has caused substantial slowdowns at both captive and commercial heat treaters.

One of the largest auto parts suppliers in the world, Magna International has cut its sales forecast for the year because of the ongoing shortage, this has in turn caused a slowdown in their heat treatment department at Magna Powertrain in Ramos Arizpe, Mexico. This facility started production in 2016 and the heat treatment department which “The Monty Team” have visited consists of a number of multirow pusher furnaces, the bulk of which came from the Magna Powertrain facility in Syracuse, NY, USA, a location which is now a distant memory.

Until this issue is resolved we expect the volume of heat treating around the world to “languish”.

“Magna International Inc, whose bid for Swedish rival Veoneer was trumped by chipmaker Qualcomm, cut its full-year sales forecast on Friday, citing a slowdown in automobile production as a semiconductor shortage plagues the sector.

Chip scarcity has hampered automobile production around the world, bringing some assembly lines to a halt, with automakers warning the chip shortage could extend, even as vehicle demand booms in markets including the United States.

“The second quarter of 2021 included the production disruptions due to the ongoing global semiconductor chip shortage,” Magna said in a statement. The global semiconductor chip shortage will cost automakers $110 billion in revenue this year, according to consulting firm AlixPartners.

Auto parts supplier Aptiv Plc said the previous day it expects higher costs due to pandemic-related supply chain problems to spill into the next year.

Chipmaker Qualcomm Inc said on Thursday it had offered to buy Veoneer Inc for $4.6 billion, an 18.4% premium to a bid in July by Canada’s Magna International Inc that was accepted by Veoneer’s board. Veoneer has said its board would evaluate the proposal from Qualcomm and the terms of the Magna merger agreement.

Magna’s revenue for the year is now expected to be between $38 billion and $39.5 billion, compared with a previous forecast of $40.2 billion to $41.8 billion.

Magna reported net income attributable of $424 million, or $1.40 per share, in the quarter ended June 30, compared to a loss of $647 million, or $2.17 per share, a year earlier. Total sales more than doubled to $9.03 billion, but missed estimates of $9.29 billion.”

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